Correlation Between INTERSHOP Communications and Chongqing Machinery
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By analyzing existing cross correlation between INTERSHOP Communications Aktiengesellschaft and Chongqing Machinery Electric, you can compare the effects of market volatilities on INTERSHOP Communications and Chongqing Machinery and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in INTERSHOP Communications with a short position of Chongqing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERSHOP Communications and Chongqing Machinery.
Diversification Opportunities for INTERSHOP Communications and Chongqing Machinery
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTERSHOP and Chongqing is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding INTERSHOP Communications Aktie and Chongqing Machinery Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Machinery and INTERSHOP Communications is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on INTERSHOP Communications Aktiengesellschaft are associated (or correlated) with Chongqing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Machinery has no effect on the direction of INTERSHOP Communications i.e., INTERSHOP Communications and Chongqing Machinery go up and down completely randomly.
Pair Corralation between INTERSHOP Communications and Chongqing Machinery
Assuming the 90 days trading horizon INTERSHOP Communications Aktiengesellschaft is expected to generate 0.2 times more return on investment than Chongqing Machinery. However, INTERSHOP Communications Aktiengesellschaft is 4.94 times less risky than Chongqing Machinery. It trades about 0.08 of its potential returns per unit of risk. Chongqing Machinery Electric is currently generating about -0.01 per unit of risk. If you would invest 175.00 in INTERSHOP Communications Aktiengesellschaft on November 3, 2024 and sell it today you would earn a total of 5.00 from holding INTERSHOP Communications Aktiengesellschaft or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERSHOP Communications Aktie vs. Chongqing Machinery Electric
Performance |
| Timeline |
| INTERSHOP Communications |
| Chongqing Machinery |
INTERSHOP Communications and Chongqing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERSHOP Communications and Chongqing Machinery
The main advantage of trading using opposite INTERSHOP Communications and Chongqing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERSHOP Communications position performs unexpectedly, Chongqing Machinery can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Chongqing Machinery will offset losses from the drop in Chongqing Machinery's long position.The idea behind INTERSHOP Communications Aktiengesellschaft and Chongqing Machinery Electric pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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